minnesota independent school forum …...minnesota independent school forum statements of financial...

MINNESOTA INDEPENDENT SCHOOL FORUM

FINANCIAL STATEMENTS ANDINDEPENDENT AUDITOR'S REPORT

June 30, 2018 and 2017

- This page intentionally left blank -

MINNESOTA INDEPENDENT SCHOOL FORUMTABLE OF CONTENTS

PageNumber

Independent Auditor's Report 1

Statements of Financial Position Statement 1 4

Statements of Activities Statement 2 5

Statements of Functional Expenses Statement 3 6

Statements of Cash Flows Statement 4 8

Notes to Financial Statements 9

FINANCIAL STATEMENTS

INDEPENDENT AUDITOR’S REPORT

To the Board of Trustees Minnesota Independent School Forum Saint Paul, Minnesota We have audited the accompanying financial statements of Minnesota Independent School Forum (a nonprofit organization), which comprise the statements of financial position as of June 30, 2018 and 2017, the related statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

1

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Minnesota Independent School Forum as of June 30, 2018 and 2017, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. REDPATH AND COMPANY, LTD. St. Paul, Minnesota September 6, 2018

2

FINANCIAL STATEMENTS

3

MINNESOTA INDEPENDENT SCHOOL FORUMSTATEMENTS OF FINANCIAL POSITION Statement 1June 30, 2018 and 2017

2018 2017Assets:

Current assets:Cash and cash equivalents $346,964 $326,644Contributions receivable 187,753 46,363Other receivables 6,380 1,300Prepaid expenses 13,285 14,600

Total current assets 554,382 388,907

Property and equipment:Furniture and equipment 22,564 28,048Website design 12,726 12,726Less: Accumulated depreciation (26,283) (28,179)

Total property and equipment 9,007 12,595

Total assets $563,389 $401,502

Liabilities and net assets:

Liabilities:Current liabilities:

Accounts payable $10,198 $3,531Note payable, current portion - 22,099Accrued expenses - 4,214Deferred revenue 5,350 9,563

Total current liabilities 15,548 39,407Long-term liabilities:

Note payable, long-term portion - 17,101Total liabilities 15,548 56,508

Net assets:Unrestricted 116,450 48,901Temporarily restricted 431,391 296,093

Total net assets 547,841 344,994

Total liabilities and net assets $563,389 $401,502

The accompanying notes are an integral part of these financial statements.4

MINNESOTA INDEPENDENT SCHOOL FORUMSTATEMENTS OF ACTIVITIES Statement 2For the Years Ended June 30, 2018 and 2017

Temporarily TemporarilyUnrestricted Restricted Total Unrestricted Restricted Total

Revenues:Support:

Contributions $66,042 $45,495 $111,537 $66,147 $43,974 $110,121Grants 147,000 378,500 525,500 117,000 231,500 348,500Sponsorships 74,500 - 74,500 74,350 - 74,350In-kind contributions 3,232 - 3,232 2,700 - 2,700

Revenue:Member dues 149,962 - 149,962 143,175 - 143,175Program income 34,652 - 34,652 42,945 - 42,945Interest income 1,253 - 1,253 936 - 936Other income - - - 10 - 10

Net assets released from restrictions 288,697 (288,697) - 315,218 (315,218) - Total revenues 765,338 135,298 900,636 762,481 (39,744) 722,737

Expenses:Program expenses:

Public policy 23,037 - 23,037 40,322 - 40,322Educational conferences 79,016 - 79,016 83,972 - 83,972Member services 60,625 - 60,625 76,686 - 76,686STEM 218,592 - 218,592 221,899 - 221,899

Fundraising expenses 46,792 - 46,792 47,585 - 47,585Administrative expenses 269,727 - 269,727 256,263 - 256,263

Total expenses 697,789 0 697,789 726,727 0 726,727

Increase (decrease) in net assets 67,549 135,298 202,847 35,754 (39,744) (3,990)

Net assets - beginning of year 48,901 296,093 344,994 13,147 335,837 348,984

Net assets - end of year $116,450 $431,391 $547,841 $48,901 $296,093 $344,994

20172018


MINNESOTA INDEPENDENT SCHOOL FORUMSTATEMENTS OF FUNCTIONAL EXPENSES Statement 3For the Years Ended June 30, 2018 and 2017 Page 1 of 2

Public Educational MemberPolicy Conferences Services STEM Fundraising Administration Total

Expenses:Salary and benefits $12,619 $31,799 $44,675 $37,855 $37,573 $208,976 $373,497Outside services 5,600 5,700 300 36,900 - 4,451 52,951Equipment related 632 1,668 2,197 1,712 1,866 10,359 18,434Rent/utility/parking 860 2,191 3,085 2,635 2,575 14,423 25,769Telephone 99 293 387 297 322 1,713 3,111Legal and accounting - - - - - 14,187 14,187Depreciation - - - - - 3,588 3,588Office and general 104 2,002 602 954 327 3,200 7,189Postage 13 18 59 53 241 375 759Printing - 1,569 - 529 68 603 2,769Meals/entertainment 163 - 352 57 1,161 246 1,979Mileage and parking 16 255 593 71 30 992 1,957Insurance - - - - - 2,044 2,044Meetings/conferences 10 33,402 1,609 4,560 - 1,047 40,628Professional development 1,874 - 750 106 150 205 3,085Dues and subscriptions 1,000 - - 3,567 2,332 530 7,429Advertising 47 119 1,016 192 147 892 2,413Interest - - - - - 1,896 1,896Grants - - 5,000 129,104 - - 134,104

Total expenses $23,037 $79,016 $60,625 $218,592 $46,792 $269,727 $697,789

2018

Support ServicesProgram Expenses


MINNESOTA INDEPENDENT SCHOOL FORUMSTATEMENTS OF FUNCTIONAL EXPENSES Statement 3For the Years Ended June 30, 2018 and 2017 Page 2 of 2

Public Educational MemberPolicy Conferences Services STEM Fundraising Administration Total

Expenses:Salary and benefits $16,989 $33,074 $53,358 $32,761 $38,097 $189,735 $364,014Outside services 17,990 4,684 12,750 36,338 - 11,605 83,367Equipment related 788 1,892 2,511 1,531 1,887 10,183 18,792Rent/utility/parking 1,184 2,423 3,650 2,258 2,592 12,846 24,953Telephone 192 309 392 276 297 1,495 2,961Legal and accounting - - - - - 14,106 14,106Depreciation - - - - - 4,201 4,201Office and general 182 1,240 458 727 307 2,981 5,895Postage 3 6 264 42 276 315 906Printing - 1,590 - 548 - 565 2,703Meals/entertainment 101 78 106 - 1,493 - 1,778Mileage and parking 98 235 111 36 36 742 1,258Insurance - - - - - 2,042 2,042Meetings/conferences - 38,026 2,524 5,422 - 449 46,421Professional development 2,213 - - - 100 - 2,313Dues and subscriptions 527 12 61 3,406 2,387 1,053 7,446Advertising 55 403 501 325 113 599 1,996Interest - - - - - 3,346 3,346Grants - - - 138,229 - - 138,229

Total expenses $40,322 $83,972 $76,686 $221,899 $47,585 $256,263 $726,727

2017

Program Expenses Support Services


MINNESOTA INDEPENDENT SCHOOL FORUMSTATEMENTS OF CASH FLOWS Statement 4For the Years Ended June 30, 2018 and 2017

2018 2017

Cash flows from operating activities:Change in net assets $202,847 ($3,990)Adjustments to reconcile change in net assets to net cash provided (used) by operating activities:

Depreciation 3,588 4,201Change in assets and liabilities:

Contributions receivable (141,390) 23,396Prepaid expenses 1,315 2,857Other receivables (5,080) 3,935Accounts payable 6,667 (5,258)Accrued expenses (4,214) 4,154Deferred revenue (4,213) 2,033

Net cash provided by operating activities 59,520 31,328

Cash flows from investing activities:Purchase of property and equipment - (3,181)

Cash flows from financing activities:Payments on note payable (39,200) (20,719)

Net increase in cash and cash equivalents 20,320 7,428

Cash and cash equivalents - beginning of year 326,644 319,216

Cash and cash equivalents - end of year $346,964 $326,644

Supplemental disclosure of cash flow information:Cash paid for interest $1,896 $3,346


MINNESOTA INDEPENDENT SCHOOL FORUM NOTES TO FINANCIAL STATEMENTS June 30, 2018 and 2017

Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. NATURE OF ACTIVITIES Founded in 1976, the Minnesota Independent School Forum (MISF) is the largest membership organization serving independent and private schools in Minnesota. Our mission is to strengthen Minnesota’s independent schools through advocacy and advancement. MISF helps inform lawmakers, policy makers, and the general public about the contributions that independent education makes to our state and society. MISF increases the sector’s capacity for collective action through professional development, advocacy, research, STEM programming and resources and leadership. We build relationships with donors, funders and collaborative partners to support targeted programs. Our member schools are provided with resources, connections, education and expertise in critical disciplines common to our schools. MISF believes every student deserves and needs to benefit from its programs, services, education research, and public policy support. We raise funds and serve as the “access point” for the private and independent school community. For some we are viewed as the “district of record” for private schools related to membership and resources. We have developed strong and mature relationships with the Minnesota Department of Education as the first call for topics and issues that may have impact and effect on the nonpublic schools of Minnesota.

B. BASIS OF PRESENTATION Financial statement presentation follows U.S. generally accepted accounting principles (GAAP) and are prepared on the accrual basis of accounting. GAAP establishes external financial reporting by not-for-profit organizations and requires that resources be classified for accounting and reporting purposes into three net asset categories: (a) unrestricted net assets, (b) temporarily restricted net assets, and (c) permanently restricted net assets. Net assets of the two restricted classes are created only by donor-imposed restrictions on their use. All other net assets, including board-designated or appropriated amounts, are legally unrestricted, and are reported as part of the unrestricted class. MISF does not have any permanently restricted net assets. C. CONTRIBUTIONS MISF reports gifts of cash and other assets as temporarily restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Contributions receivable consist of commitments from various foundations and private donors. There is no allowance for uncollectible accounts, as management believes all contributions and grants receivable are collectible. The present value discount is immaterial and has not been recorded. Contributions are recognized as revenue in the period when an unconditional promise to give is received. Conditional promises to give are recognized when the conditions on which they depend are substantially met.

9


D. MEMBER DUES Member dues are revenue provided by the member schools and is used for the operating expenses of MISF and certain direct and indirect program expenses. MISF extends credit on an unsecured basis to its member schools, all of which are private schools in the State of Minnesota. Member dues receivable are stated at unpaid balances, less an allowance for doubtful accounts of $0 at June 30, 2018 and 2017. Losses on receivables are provided for using the allowance method, which is based upon experience and other circumstances, which may affect the ability of member schools to meet their obligations. E. IN-KIND CONTRIBUTIONS Donations of goods are recorded at their estimated fair value at the date of donation. Donated services are recognized as contributions in accordance with GAAP, if the service (a) creates or enhances nonfinancial assets or, (b) specialized skills are performed by people with those skills that would otherwise be purchased by MISF. Donated services that require a specialized skill are recorded at the value had the services been purchased.

In-kind contributions are as follows:

2018 2017

Goods $2,032 $1,500Services 1,200 1,200

$3,232 $2,700

F. CASH AND CASH EQUIVALENTS For purposes of the statement of cash flows, cash and cash equivalents is defined as the checking and savings accounts of MISF and short-term investments with original maturity dates of three months or less. Bank balances may exceed FDIC coverage from time-to-time through-out the year. G. TAX STATUS MISF has received notification that it qualifies as a tax-exempt organization under Section 501(c)(3) of the U.S. Internal Revenue Code and corresponding provisions of State law and, accordingly, is not subject to federal or state income taxes. However, any unrelated business income may be subject to taxation. MISF has not had any material unrelated business income. A tax expense or benefit from an uncertain income tax position (including tax-exempt status) may be recognized only when it is more likely than not that the position will be sustained upon examination by taxing authorities. Management believes MISF has no uncertain income tax positions that would result in an accrual, expense or benefit under the more likely than not standard.

10


H. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. I. FUNCTIONAL EXPENSE ALLOCATION The costs of providing the various programs and activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. J. PROPERTY AND EQUIPMENT MISF capitalizes all property and equipment acquisitions in excess of $500. The cost of property and equipment is depreciated over the estimated useful lives of the related assets. Depreciation is computed using the straight-line method over an estimated useful life of five years. Maintenance and repairs are charged to operations when incurred. When property and equipment is sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations. Website design is amortized over five years using the straight-line method. Amortization expense is included with depreciation. Depreciation expense for the years ended June 30, 2018 and 2017 was $3,588 and $4,201, respectively.

K. UNCOLLECTIBLE RECEIVABLES MISF uses the allowance method to account for uncollectible receivables. The allowance is based on prior years’ experience and management’s analysis of the outstanding receivables. At June 30, 2018 and 2017, MISF believes all balances to be collectible; therefore, no allowance is necessary. L. CONDITIONAL GRANTS AWARDED MISF awards grants on an annual basis. Typically, a portion of each grant is not paid until the recipient has met certain conditions. Grant expense is recognized when the conditions are met. Conditional grants awarded but not recognized at June 30, 2018 and 2017 was $37,227 and $36,541, respectively.

Note 2 RETIREMENT PLAN MISF sponsors a defined contribution salary reduction retirement plan that covers all full-time employees. The plan provides for a 6% employer contribution based on all eligible employee compensation. Pension expense for the years ended June 30, 2018 and 2017 was $16,473 and $17,269, respectively.

11


Note 3 TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets are restricted as follows:

2018 2017

Time restricted $21,252 $22,863Purpose restricted:

STEM 410,139 255,230Educational conferences - 18,000

Total $431,391 $296,093

Purpose restrictions may also be restricted for time. Note 4 OPERATING LEASES MISF has an operating lease agreement for office space and storage which began on January 1, 2012 and has been amended to extend through September 30, 2020. The amended agreement calls for monthly base rental payments of $795, increasing yearly by 25 cents per square foot. The agreement also calls for the payment of pro rata operating expenses and real estate taxes for leased premises. Rent and utility expense for years ended June 30, 2018 and 2017 was $19,933 and $19,135, respectively. MISF has an operating lease for a copier ending November 2021. The agreement calls for monthly payments of $245. Rent expense for the copier was $2,938 for each of the years ended June 30, 2018 and 2017, respectively. Minimum future rental payments under these non-cancelable operating leases are as follows:

Years EndingJune 30, Total

2019 $13,2672020 13,5122021 3,883

12


Note 5 NOTE PAYABLE MISF had a note payable which had been most recently modified on March 4, 2016. Terms included monthly payments of $2,000, an interest rate of 6.50%, and maturity date of March 31, 2019. The note was secured by substantially all assets. The remaining note payable balance was paid in full in June 2018. Note 6 SUBSEQUENT EVENTS Management has evaluated subsequent events through September 6, 2018, the date that this report was available to be issued, and concluded that there are no subsequent events that require disclosure.

13


14

minnesota independent school forum …...minnesota independent school forum statements of financial...

Documents